Goldman Sachs has created an investment platform for wealthy clients and family offices focused on private companies. As demand grows for direct investment in high-growth companies before they list, Goldman Sachs expanded its existing alternative investment business into a separate organisation that combines direct private-company investment and support for buying and selling stakes.

On July 21, local time, CNBC reported that Goldman Sachs launched a new unit called the "Alternative Investments Platform" and integrated related businesses.

The key change is not investing in products that bundle multiple assets like private equity funds. It is to invest directly in stakes in individual private companies and support trading of those stakes. The new platform includes the existing alternative investment business and 2 newly created teams. One team handles direct investment in individual private companies, while the other supports clients in buying and selling unlisted holdings they own.

Goldman Sachs sees the recent flow of wealthy money into large, high-growth companies before they list as a new business opportunity. Kristin Olson (크리스틴 올슨), global head of alternatives for Goldman Sachs Wealth, said clients want access to large, high-growth technology stocks before they come to public markets as interest in them rises.

Behind this view is a structural change on Wall Street. Promising startups are staying private much longer than before, entrenching a system in which early investors capture a significant part of the growth gains before an initial public offering. Olson said some companies list at around a $1 trillion market capitalisation and that missing participation in the process means missing a large part of the growth cycle.

Goldman Sachs has already arranged direct investment in late-stage private companies for wealthy clients for about 20 years to meet such demand. Olson cited Facebook before its 2012 initial public offering, and later SpaceX, Stripe and Canva. She added that this time the difference is that the bank separated the business into an independent platform to reflect increased demand. Olson said Goldman Sachs decided to define the business as a clearer area and strengthen it in earnest.

Investment targets are focused on late-stage companies rather than early startups. Goldman Sachs prefers companies that already have products, generate meaningful revenue and have a relatively clear path to profitability. Olson said the strategy is to find an appropriate point between risk and return.

Another factor driving demand is an artificial intelligence investment boom. Goldman Sachs is directing client money not only to large language model developers but also to AI infrastructure areas such as data centres and related projects. This reflects a trend in which the AI frenzy is spreading beyond investment in a handful of model companies to underlying facilities.

The announcement came a few days after Goldman Sachs posted its biggest-ever quarterly revenue. Executives at the time mentioned that AI-related activity was increasing across investment banking, trading and broader financial businesses. Goldman Sachs is seeking gains across multiple parts of the AI investment cycle while continuing to expand a more stable earnings base in wealth management and asset management.

The new platform also formalises a business to provide liquidity in private investment stakes. Goldman Sachs plans to expand market functions for clients to trade unlisted holdings through a newly created secondary advisory organisation. It will also provide sale advice to clients seeking to dispose of investment assets they came to hold without going through Goldman Sachs.

Ultimately, the revamp is close to a strategy to cover both entry into and exit from private investments. As demand grows for access to promising companies before they list and existing investors’ demand to cash out also rises, Goldman Sachs is broadening services for wealthy clients by combining direct investment arrangement and secondary trading in a single platform.